If there is a value that has been profitable during the last, that is none other than Inditex textile. It has generated a return to its investors of almost 100%. Something that has not been able to match other companies listed on the equity markets. To the point that it has become a business model whose fame has spread beyond our borders. Not in vain, it was being one of the safest stock market proposals of the selective index of Spanish equities, the Ibex 35. Where with all certainty you could have the capital invested safely.
On the other hand, Inditex offers until now a dividend with a yield close to 4%. It is certainly not one of the most important in Spanish equities, but it is an added value that it offers its shareholders. So that in this way, they have a fixed and guaranteed income every year. As a consequence of this strategy, they will also be in a position to create a savings bank for the next ones. These are definitely some of the identity signs that Inditex provides at this time.
However, it seems that the first signs of its weakening have started to appear. Something completely logical, on the other hand, after having revalued its price year after year. With little rest and with business results that have been surprising the different analysts of the financial market. Being, in any case, the main stimulus to grow in its valuation on the stock market. But this scenario may have definitely changed for the worse. Now is the time to develop a different strategy in relation to the shares of this company led by the Galician entrepreneur Amancio Ortega.
Inditex: the best has already been seen
This is one of the most likely scenarios for the next few months. We may now witness a change in trend. To go from bullish to bearish, even with large falls in the conformation of their prices in the financial markets. In this sense, you should take special precaution if your desire is to open positions from now on. Among other reasons because now you have risks that did not exist before. To the point that you can leave a lot of euros on the way. Because the depreciation of its price can be one of the surprises during the 2018 financial year.
On the other hand, you should not forget that Inditex already will not have the presence of its boss and founder, Amancio Ortega, after deciding that it is time to drop everything. A factor that can undoubtedly penalize your behavior in equities in the coming years. In fact, the price of its shares has been showing very important corrections for some time. As one of the most important signals about your trend reversal. Now we will have to wait for these signs of which we speak to be confirmed.
Business results in 2017
Inditex continues with the global expansion of its integrated model of online stores and sales. In the period, Inditex has had a strong operating performance. Sales stood at 17.963 million euros, 10% higher than those of the same period last year. Like-for-like sales have maintained strong growth. In August Zara, Bershka, Massimo Dutti, Pull & Bear, Stradivarius, Oysho and Zara Home have opened stores in Belarus with a great reception. In the first nine months of 2017, Inditex opened stores in 52 markets. At the end of the period, Inditex operated 7.504 stores in 94 markets. Inditex has continued with the global development of its integrated online store and sales strategy with the launch in October of online sales for Zara in India, with which Inditex's online sales are available in 45 markets. Gross Margin amounted to 10.319 million euros, 9% higher than in the same period of the previous year, standing at 57,4% of sales.
Its shares are priced at around 30 euros
With regard to the valuation of their securities, there is no doubt that they are in an area worth watching as it may be the source of further falls. At the moment, their actions are very close to the level of the $30. But the most important thing is that almost 7% of its valuation was left in the markets in the last year. This is one of the signs that its evolution is not the most appropriate at this time to make the savings profitable. At least as he did a couple of years ago alone. In this sense, the change in trend is more than appreciable.
In any case, if your current price is compared with other short terms, your position is not very advantageous either. In particular, with the comparison in recent months. Always in negative territory and as if to meditate if it really is a good time to make a positioning in this value of the textile index. In this sense, it cannot be forgotten that only twelve months ago its shares were trading at the 32 euro line. Furthermore, this weakness is also accompanied by a decrease in the volume of contracts. This is a powerful signal that indicates that their prices may continue to decline from now on.
Rebound in recent weeks
However, its graphical appearance is more problematic than you can initially detect. This is due to the latest increases in the preceding weeks. Regarding this aspect, you cannot forget that it is very relevant that Inditex is one of the few bullish exceptions after having been punishment target by small and medium investors. Seeing, in short, an opportunity to buy their shares at a very good price. With a view to getting 31 or 32 euros per share in a rather short period of time. In what would be conformed as a short-term operation.
On the other hand, the financial agent Renta 4 reiterates its advice on overweight Inditex in investment portfolios. Analysts place its target price at 37,20 euros per share with figures for its third fiscal quarter on the table. On the other hand, those of Citi also affect the same recommendation. That is, they advise buying with an estimated target price very close to 39 euros per share. While Securities analysts are going down this same path. Believing that Inditex shares can also reach this price level. Still, they are the most optimistic financial market traders of all.
The 29 euro levels are decisive
If you are thinking of entering this important value of the selective index of the Spanish stock market, you should have as a reference the level of 29 euros. Because it cannot be forgotten that although Inditex's titles have dropped to 20 since it reached the annual highs, still remain in an uptrend. Although it is also true that less and less clear and with the risk of having more falls from these precise moments. It is something that you must have to carry any kind of strategies in your investment from now on. Beyond the figures that you leave in your quote. Among other reasons because it can generate some other bearish trap in which you can fall with some ease. It is another of the risks in this class of operations in the equity markets.
From these technical approaches, the most advisable thing is to stay outside the value to check if it is able to respect the aforementioned level of 29 euros per share. On the other hand, the textile company currently presents two delicate scenarios for its interests. On the one hand, the reference to effect that the foreign exchange market it can affect your price. And on the other, the impact that the Catalan process may have on its income statement in the coming quarters. But, therefore, be very careful with your actions because they may be in a very unfavorable situation for your interests. After many, many years with everything going for him.
Doubts among investors
In any case, no one can be impassive in the face of what happens with one of the most liquid values of national equities. That for the first time in many years he begins to doubt his possibilities. Something that its most loyal investors did not expect. It is no longer a clear purchase operation, but you even have to consider the fact that it can be very profitable undo their positions. Especially if they have been bought many years ago. And with during the year 2017.
Another data to take into account is that in most of the last quarters its results have been hit by the currency effect. Now there will be no choice but to check if this trend will also be real during this new year. There are fewer months to find out without less risk. Because at the moment it does not offer the same security as in the past. Despite presenting a very solid line of business at all levels.